The problem with millennials is that they just won’t sit still and stick with the cultural definitions they’ve been given. Three years ago, millennials were the “experience-oriented” customers who preferred buying experiences to things. Among points of proof for that claim: millennials’ extreme enthusiasm for eating out.
But these days the trends seems to have shifted — and with it, the narrative.
Restaurant sales growth has been slowing for the last three years at a pace that would normally indicate a weak economy, according to economists that have been studying the issue. The hurricanes in the fall exacerbated the problem, but the overall trend has been for depressed growth year over year for some time.
“It stands out as a bit unusual how soft restaurant spending has been, considering where we are in the business cycle,” said Michelle Meyer, head of U.S. Economics at Bank of America Merrill Lynch. “The consumer should be spending more on a broad range of items. But we’ve seen restaurants slowing more akin to a recessionary environment.”
Retail sales, of which restaurant sales are counted as a whole, grew 0.2 percent in October (excluding cars and gas), or 0.4 percent (when cars and gas are counted in).
Though all demographics have changed in relation to eating out, millennials have logged the biggest switch — with a spending rate that went from 9 percent year over year in 2015 to just 1.6 percent now.
So, why the shift?
One thought is change in lifestyle — millennials are older on average than they were and might be spending on different things. But that should mean grocery spending is going up to match falling restaurant spending, and the data doesn’t see that happening.
“Grocery spending has also been pretty slow,” she said.
However, on the assumption that millennials have not developed photosynthetic powers and are thus still probably eating, another possible disruption could be online grocery shopping, which may not be fully captured in the data.
And even that explanation doesn’t fully speak to the oddness of the data, according to economists.
“It’s unusual to have this type of restaurant slowdown without having the economy slow down broadly,” Meyer said. She is watching the holiday season in November and December as consumers spend for the holiday and go out to shopping centers. “I think it will be telling to observe what they spend on,” she said.